I am a Senior Political Contributor at Forbes and the official 'token lefty,' as the title of the page suggests. However, writing from the 'left of center' should not be confused with writing for the left as I often annoy progressives just as much as I upset conservative thinkers. In addition to the pages of Forbes.com, you can find me every Saturday morning on your TV arguing with my more conservative colleagues on "Forbes on Fox" on the Fox News Network and at various other times during the week serving as a liberal talking head on other Fox News and Fox Business Network shows. I also serve as a Democratic strategist with Mercury Public Affairs.

6/30/2012 @ 9:52AM4,632 views

Will Red State Governors Opt Out Of Medicaid Expansion?

While supporters of Obamacare are cheering the Supreme Court’s ruling upholding the constitutionality of the law, the celebration may be short-lived as focus begins to shift to the one key aspect of the Affordable Care Act that was limited by the decision – the expansion of Medicaid to bring health insurance to approximately 17 million previously uninsured Americans.

As originally drafted and passed into law, states that failed to adopt the expansion and offer Medicaid coverage to anyone earning less than 133 percent of the Federal Poverty Level risked losing 100 percent of the money they receive from the federal government towards their state run Medicaid programs, even as currently offered.

In the ruling handed down on Thursday, the court held that such a penalty was unconstitutional and that the federal government is not permitted to punish the states in such a manner, leaving it to the states to decide if they want to stand pat with the Medicaid programs they currently operate or accept the expansion —and the federal largesse that comes with it.

Under the law, the federal government will pick up 100 percent of the cost of expansion for three years, 95 percent for the two years that follow and 90 percent of the costs thereafter. The expansion will allow the states to provide the benefit to many more low income Americans without taxing their state budgets at all for three years and then only slightly in the years that follow.

Currently, the federal government picks up the tab for about 55 percent of the costs of a state Medicaid program.

Those governors who are strong objectors to Obamacare will, no doubt, feel a strong ideological urge to reject the expansion and leave things as they are. But is that really going to fly? After all, conscientious objection to Obamacare is one thing but the reality of politics is something else entirely.

So far, there have only been angry ‘rumblings’ from Republican governors like Sam Brownback of Kansas and Bobby Jindal of Louisiana who say they will continue their objection to the ACA by refusing to begin organizing a healthcare exchange in their respective states and wait for the outcome of the November election. Other governors, such as Texas’ Rick Perry, who has refused federal money in the past, are staying a bit quiet on the subject, saying only that they will look into the matter and make a decision at a later time.

While it is to be expected that GOP governors—particularly those who refused to implement the requirements of Obamacare until they heard from the Supreme Court—would engage in a bit of sabre rattling, we can expect few, if any, to be foolish enough to pass up the opportunity to expand their Medicaid programs when Washington is offering such an exception deal for them to do so.

As National Journal’s Ron Brownstein points out, the 26 states that sued to block the Medicaid expansion contain over half of the nation’s unemployed and an even greater percentage of the nation’s uninsured population. Texas—one of the plaintiff states in the healthcare lawsuit—alone accounts for slightly over 6 million of the uninsured, 2 million of whom would gain coverage under the Medicaid expansion.

Additionally, because the federal government picks up virtually all of the costs attached to covering more people through expanded Medicaid, the program represents a massive transfer of money to those red states that tend to have less generous Medicaid programs already in existence. As a result, a state like Texas, with a rather sparse program, is going to get an enormous sum of federal cash where Massachusetts, which already has a generous program, will get very little in federal funding.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

Setting aside the saving of lives and what not, if you are into that sort of thing, expansion of health care is probably one of the most effective and efficient anti-poverty programs of all. Before Medicare, 1/3 of seniors were in poverty. After, 1/10. Over a 300% decrease. Nice tangential benefit I would say.

You are wrong, not only will the governors of the “red states” not reject the money associated with the expansion of Medicare under the PPACA, they will run for re-election touting how they got all of this extra money out of the federal government and into their own state. We have seen this before. When the American Recovery and Reinvestment Act of 2009 was announced, conservative governors denounced it as “socialist” but then fought to get as much of the actual money as they could and claimed credit for it at campaign events.

The same thing happened with the “green energy”. Conservatives have decided that it is a scam, the worst sort of “crony capitalism”. Even after all of that, when it comes time for Republicans to put Green Energy into practice, or more specifically when Federal Green Energy Money is to spent, Republicans have an entirely different attitude.

“…Mr. McConnell, of Kentucky, is one of several prominent Republicans who have worked to steer federal money to clean-energy projects in their home states, Energy Department documents show.

Mr. McConnell made two personal appeals in 2009, asking Energy Secretary Steven Chu to approve as much as $235 million in federal loans for a plant to build electric vehicles in Franklin, Ky.

‘I hope you will realize the importance of such job creation to Kentucky,’ Mr. McConnell said in a July 2009 memo supporting an application from Zap Motor Manufacturing.”[1]

Rest assured, when election time comes around, not only will the the Republican governors have taken the free federal money, they will be boasting about it.

David, I know readers love to tell me I’m wrong — but since you are agreeing with me when you point out that all of the governors will end up taking the money, why am I wrong? Did you actually read the entire article?

I believe that you were in that you seem to suggest that the Republican governors would take the money reluctantly, perhaps a bit “red faced” at the seeming hypocrisy of their actions in light of their words. I am suggesting rather that they will publicly claim credit for bringing this federal windfall to their state – even if they do fully disclose its origin.

Actually, I hate writing comments that disagree with you, Rick. I think you write well-thought out arguments with good, supporting facts.

While I think one should never underestimate the ability of the Republicans to cut off their nose to spite their faces, I think you absolutely correct. The governors of the states that did want Obamacare have just won the right to do something they won’t do. This is rather like George Bush fighting all the way to the Supreme Court the right to eat broccoli or for me to fight to watch sports on television (the only team I follow is the Washington Generals and their games aren’t televised, but I admire a team that goes out and plays knowing the odds are so against them).

Let’s hope so, else wise the earth will be put out of orbit, when all the people with half a brain move to the states that do. And a double Yes Yes, since the hospitals in those states will either shutter the doors or camp out on the Governors porch demanding that they do.

This is really a no brainer and I can totally accept that the court did not find it appropriate to penalize states that do not wish to participate by taking away all of the aid. That wouldn’t really be nice, nor was it necessary.

Does that mean that we will not have Red Governors mounting the pulpits with their Deutschland UberAlles speeches about how they will reject the aid, backed up with parades of citizens goose stepping their way through hospital corridors and throwing Medicaid patients out the windows. Ah! Within a year they will all try to sneak in under the wire, regardless of who is elected. This is how things are done in America. Everything is a reality show with a loser, and that’s what makes the ACA so hard to understand…Everybody Wins, not to mention 30 million more people with access to something they never had.

With millions of more people insured, wouldn’t there be a demand for more medical services? As a result, this should create a hiring boom for medical personnel, provided these residents have the appropriate skills. I would think these red states would welcome more jobs. I agree with you that these states will be glad to take the money. It’s the deal of the century!

You’re right…the bad news is that we don’t have enough physicians which is going to create some new problems. However, the answer is not to deny coverage to more people because we have a physician shortage-the answer is to fix the physician shortage so there are enough doctors for everyone.

You’re absoluetly right, Datagal. The ACA does indeed CREATE jobs – contrary to the current GOP rhetoric that it will kill jobs. It’s such a no brainer, hard to believe anyone of sound mind would not get that. =)

My organization Residency Ready Physicians on Facebook has currently 430 American Doctors who were denied positions in the residency match. Unfortunately this is the only was so far to get license and practice medicine in USA. 98% of our members according to our internal survey are willing to go and practice internal/family medicine in underserved areas. Many actually live there since long with their families. In 2011, 2721 of the 23,421 available residency positions went to non-US IMG’s while 971 American graduates (each with approximately $200,000 in student loans) and 5708 IMG’s who are US Citizens and permanent residents who have passed the required licensing exams and who applied, were unable to find a position. At the same time IMG’s, mainly from India and Pakistan, who make the major numbers of J1 visa applicants for medical residency, match on J1 visas. They use the visa waiver program to immigrate to USA because of the better pay. It is unethical to admit doctors on J1 visas and “close our eyes” knowing that majority of them are a drain the medical taskforce of their countries of origin. In addition the numbers of J1 visas issued, 8,978 closely approximates the numbers of US IMGs applying for residency but being unmatched. I would like to make it clear that even the Indian government has recently acknowledged the “brain drain” of its doctors (according to the cited publication, more than 3000 for the last year) who come for residency training on J1 visa, but actually never go back to India. According to that publication Indian government pays estimated $60,000 per year/per medical student for Medical School and supplies, while all those doctors never return any revenue or services to their home country. http://india.blogs.nytimes.com/2012/04/25/what-is-the-ministry-of-health-trying-to-tell-doctors/ Additionally, there is a great deal of anecdotal evidence that doctors taking the USMLE exams outside the United States may be receiving improper assistance and access to actual test question in advance of the test. Even in this country there is evidence of attempt to cheat the system: http://www.fbi.gov/newark/press-releases/2011/optima-university-owners-charged-with-stealing-test-questions-from-medical-licensing-exam As USMLE scores have become in the eyes of the majority Residency program Directors sole criteria to match, an interesting question is to ask NRMP is what happened with those test-takers that got 99/99 scores using “the help” of this company. Did their USMLE exams and scores were canceled and their ECFMG certificate revoked. Did their residency contract was canceled and they were fired from they are fired from residency for cheating. I hope ECFMG and NRMP can clarify those questions.

Good article, Rick. I sincerely hope you are correct in your predictions.

As I understand it, a part of how the ACA was signed off on as a deal, was that ALL Americans would have a mandate to buy insurance. That is to help out the health insurance companies in keeping up with covering medical treatments and still making a profit. Much as they have been so far – I personally think that’s highly immoral, it should be Not For Profit. If there are states that don’t participate, where does this leave the basis for this bill to succeed?

The mandate will impose fines on Americans that are financially able to buy insurance but don’t do it. How is that going to work if their state gets away with refusing to recognize the law?

Do heads of states have the right to legally reject the ACA for their people? If yes, where does that leave those disenfranchised Americans? Will Americans have any way to circumvent their states’ refusal to recognize/offer the ACA and have access the affordable insurance and/or medicaid?

There is cost and time involved for health care providers/hospitals to gear up for the change that ACA brings. They have no time to lose to get prepared for the switch and probably already started the conversion. With some of the red state governors’ attempt to stall if not block ObamaCare in their states, where does that leave them oher than in a giant predicament?

The GOP governors opposing the ACA are doing Americans such a disservice. This could get very ugly. I just hope those Americans who would benefit from the ACA will have access to it regardless of where they live. We may all have to move to Massachusetts. =)

You wrote: “That is to help out the health insurance companies in keeping up with covering medical treatments and still making a profit.”

Actually, the reason for the mandate is to allow private insurance companies to issue insurance to those more likely to get sick (pre-existing conditions) without going broke. Insurance pools work on a formula that requires there to be 80% healthy people in the pool to pay for the 20% who are sick. If more sick people are admitted the pool without a counter-balancing addition of healthy people, it all falls apart. This is the reason for the mandate. To bring enough health people to the insurance pool to keep it all working.

You wrote: “If there are states that don’t participate, where does this leave the basis for this bill to succeed?” The states have the right to reject the expansion of Medicaid which will result in fewer Americans being covered as it the intent of the law. They do not have the right to simply reject the mandate provisions as, until the law is revoked or changed, it is the law of the land.

You wrote: “Do heads of states have the right to legally reject the ACA for their people? If yes, where does that leave those disenfranchised Americans?”

Governors have the right to reject the expansion of their state Medicaid programs. As noted, if they do this, fewer people will have the access to healthcare that is intended by the law. If the states fail to set up their state insurance exchanges, as required by the law, the federal government has the right to come into the state and organize the state health insurance exchange under federal direction. Beyond that, no state authority has the right to reject anything in the ACA. It is the law, whether they like it or not.

You wrote: “With some of the red state governors’ attempt to stall if not block ObamaCare in their states, where does that leave them oher than in a giant predicament?”

As noted, the federal government can set up the exchanges in a state that is not doing so. Accordingly, while some of these governors may be squeaking, the only thing they can really impact is the expansion of Medicaid in their states which, as I write in this article, I do not believe they will ultimately do. Sadly, these governors are thumbing their nose at the law which is an awful thing. Had the side that I agree with lost, it would not occur to me to dishonor the law. I might not like it but we are a nation of laws and for some of our highest elected officials to reject the law is shameful beyond belief.

By the way, while I agree the the for profit model in health care no longer works, I try to avoid the morality issue. I see it more from the perspective that the for profit business model simply doesn’t work any longer. We will, inevitably, end up with a “Medicare for all” system. I don’t see how it can be avoided.

I *thought* the law of the land applied to all. However, listening to people like Jindal and Walker, they state they won’t implement it. I guess they are throwing this stance out, based on hopes for Romney to win. Even if he did win (insert doubtful face here LOL), I don’t see how he could get the support needed to achieve striking down the law.

I may have worded the first part of how the deal was struck a little unfortunate, but your response is essentially what I meant. Because of the mandate that everybody has to pay in, even those that have no need for continuous/ongoing medical care (aka as “healthy Americans”), the insurance companies will be able to foot the bill (pun intended).

My personal rejection to “for profit” definitely stems from my own sense of morality. It just goes against my grain how profit is being put before the well-being of people. Add to that the fact that the system does not work, I would agree that ultimately, we are headed towards Not For Profit. I can’t wait! =)

I *thought* the law of the land applied to all. However, listening to people like Jindal and Walker, they state they won’t implement it. I guess they are throwing this stance out, based on hopes for Romney to win. Even if he did win (insert doubtful face here LOL), I don’t see how he could get the support needed to achieve striking down the law.

I may have worded the first part of how the deal was struck a little unfortunate, but your response is essentially what I meant. Because of the mandate that everybody has to pay in, even those that have no need for continuous/ongoing medical care (aka as “healthy Americans”), the insurance companies will be able to foot the bill (pun intended).

My personal rejection to “for profit” definitely stems from my own sense of morality. It just goes against my grain how corporate greed is being put before the well-being of people. Add to that the fact that the system does not work, I would agree that ultimately, we are headed towards Not For Profit. I can’t wait! =)